Russia’s Coal Calls For Improvement
Prompted by the limited number of domestic players and fierce competition on foreign markets, Russia’s coal company SUEK intends to construct three coal improvement factories in Kuzbas and Buryatia in an attempt to find new approaches to business.
Under the data provided by Russian Financial Research Institute, Russia grew coal export by 16 percent to over 70 million tons in 2004 with the export deliveries accounting for a fourth of the overall coal production. Today’s hope is the Asian-Pacific countries where the coal demand grows by 10 percent on year, Oleg Ordin from Financial Research Institute told Coal Round Table October 14, 2005.
But to strengthen the foreign standing, Russia has to improve coal quality. At the same time, it is not the coal export which is the strategic center of attention now, the coal should play greater part in domestic balance of fuel (coal accounts for the 18 percent of the power production in Russia, while the United States and Germany have more than 50 percent and Great Britain has 35 percent). In Russia, the coal loses to gas because of the lower rates for the latter maintained by the government.
The second reason is that the better part of coal power plants in Russia operate on the ordinary (rough) coal, which creates a lot of ecological problems. The Round Table participants acknowledged Friday that in view of today’s disproportion of domestic prices, no surge in coal consumption could be expected. Nevertheless, they called on the coal operators to improve quality. The coal producers appear quite willing to do it. SUEK, for instance, is said to be intending to construct a coal improvement plant in Buryatia and two plants in Kuzbass, though in SUEK, they have not confirmed the projects so far.
Processing of each million tons of coal in Russia costs from 700 million ruble to one billion ruble on average now.
by
www.kommersant.com
All the Article in Russian as of Oct. 17, 2005
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